Routing and Distribution with Optimization technology

Why is optimization needed for routing and distribution?

The routing and distribution of goods often represents a large portion of a company’s costs. In order to drive profitability, companies must make wise decisions about which assets to invest in, and how to best utilize the assets they have. While most companies have invested in execution systems to run their routing and distribution operations, these systems require the correct business policies and parameters in order to maximize efficiency and minimize costs. Optimization is used to find the best policies and parameters.

What types of routing and distribution problems can be addressed with optimization based technologies?

• Where and how many facilities to locate
• How to assign customers territories
• Where and how much inventory to carry
• Which modes of transportation to use
• How to best load and route vehicles

Benefits of optimization in Routing and Distribution

• Lower transportation costs
• Fewer vehicles
• Reduced working capital invested in inventory
• More responsive customer service
• Better utilization of drivers and crews
• More flexibility to accommodate drivers and crew preferences for shifts and routes
• Better compliance with policies, regulations, and work rules
• Higher utilization of facilities and vehicles